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C028 Dealer account 028 Dealer

Revenue218,022
Direct margin77,444
Activity cost47,732
ABC profit29,712 (13.6%)
Traditional profit14,079

over-charged Traditional costing assigns 63,364 of overhead from 2,266 labour hours; ABC assigns 47,732.

Profit waterfall

050,000100,000150,000200,000250,000 Revenue: 218,022 218,022 RevenueDirect cost: -140,579 -140,579 Direct costDirect margin: 77,444 77,444 Direct marginMachine run: -10,803 -10,803 Machine runHand assembly: -6,926 -6,926 Hand assemblySetups: -6,677 -6,677 SetupsDelivery: -6,158 -6,158 DeliveryQuality inspection: -5,618 -5,618 Quality inspectionPallet handling: -4,361 -4,361 Pallet handlingOther activities: -7,187 -7,187 Other activitiesProfit: 29,712 29,712 Profit

Activity costs

ActivityCostShare
Machine run10,80323%
Hand assembly6,92615%
Setups6,67714%
Delivery6,15813%
Quality inspection5,61812%
Pallet handling4,3619%
Order processing2,8546%
Customer support1,4233%
Custom finishing1,3153%
Credit and collections7322%
Returns handling6031%
Engineering changes2601%